Struggling Websites Predicted to Have Grimmest Future in Duke-Fed Study Due to Potential Insufficient Increases in Tariffs
The Q2 2025 survey conducted by Duke University’s Fuqua School of Business, in collaboration with the Federal Reserve Banks of Richmond and Atlanta, has revealed a record-high concern about tariffs and trade policy among U.S. businesses. Forty percent of the CFO respondents highlighted this issue as a pressing concern, the highest share since the survey began in 2020[1][2][3][4].
Key economic impacts highlighted by the survey include:
1. **Increased Costs and Prices**: CFOs have revised upward their own-firm unit cost and price growth projections for 2025 due to tariffs. These trade policy concerns are expected to increase operational costs that companies anticipate passing on through higher prices[1][4].
2. **Reduced Hiring and Investment**: Forty percent of the surveyed firms reported postponing or canceling capital expenditures in the first half of 2025 because of trade-related uncertainty and tariffs. This reduction in investment reflects the caution firms are showing under uncertain trade conditions[3][4].
3. **Lower Revenue Growth Expectations**: Firms concerned with tariffs expect their nominal sales revenue growth to fail to keep pace with inflation or price increases, implying that **real revenue growth is likely to contract** in 2025. This is a major shift toward a dimmer revenue outlook among tariff-affected firms compared with those not citing tariffs as a top concern[1][2].
4. **Economic Growth Outlook Deterioration**: Financial executives reduced their GDP growth expectations for the coming year from 1.9% to 1.4%. Moreover, the probability assigned to negative economic growth in the next year increased sharply from 15% to 23%, signaling increased recession risk perceptions amid the trade policy environment[1][3].
5. **Wider Business Uncertainty**: The ongoing uncertainty around trade policy, including tariffs, is weighing heavily on business decision-making. CFOs noted that unlike prior periods when trade policy was more predictable, the current unpredictability makes planning and forecasting difficult, contributing to more cautious financial outlooks and behavior[3].
In summary, the Q2 2025 survey illustrates that tariffs and trade policy concerns are now top economic risks for U.S. businesses, driving **higher costs, reduced investment, constrained revenue growth, and broader economic pessimism**, all reflecting a significant negative economic impact on the U.S. business climate in 2025[1][2][3][4].
[1] Duke University’s Fuqua School of Business and the Federal Reserve Banks of Richmond and Atlanta. (2025). Q2 2025 Survey Results. Retrieved from https://www.fuqua.duke.edu/about/news/q2-2025-survey-results [2] Meyer, B. (2025). Official Comments on the Q2 2025 Survey. Retrieved from https://www.atlantafed.org/research/commentaries/official-comments-on-the-q2-2025-survey [3] Tariff-related Uncertainty and Its Impact on U.S. Businesses. (2025). Retrieved from https://www.cfo.com/strategy/tariff-related-uncertainty-and-its-impact-on-us-businesses [4] Trade Policy and Its Impact on U.S. Businesses. (2025). Retrieved from https://www.fedgazette.org/articles/2025/q2/trade-policy-and-its-impact-on-u-s-businesses
- Due to increased operational costs and the expectation of passing on higher prices, CFOs have revised their projections for 2025 revenue growth margin.
- As a result of reduced hiring and investment, the financial growth of many businesses is likely to diminish in the first half of 2025.
- The economic outlook for businesses in the bull market shows deterioration, with a shift toward lowered revenue growth expectations and a higher probability for economic contraction in the coming year.
- The ongoing uncertainty around tariffs and trade policy hinders financial decision-making in the US economy, leading to broader economic pessimism and more cautious financial behavior among businesses.
